SouthCrest Financial Group Reports Preliminary 2Q13 Financial Results and $17.5 Million Capital Raise

PEACHTREE CITY, Ga., Aug. 1, 2013 (GLOBE NEWSWIRE) -- Kenneth H. Maloy, President and CEO of SouthCrest Financial Group, Inc. (OTCBB:SCSG), announced today that the company reported preliminary results for the second quarter of 2013, as well as progress on a significant capital raise. SouthCrest has entered securities purchase agreements with Castle Creek Capital affiliates and other institutional investors. The agreements total $17.5 million in a mix of voting common and non-voting preferred securities, at a price of $5.05 per share. The offering will close pending Federal Reserve non-objection and other conditions. "We are extremely excited about partnering with the team from Castle Creek as we continue to drive towards company goals," stated Mr. Maloy. "They are one of the most experienced and active community bank investors today, and we look forward to leveraging their experience to make SouthCrest the best community bank in the Southeast." The company intends to use the proceeds for general corporate purposes, including strategic initiatives such as the potential redemption of the TARP preferred shares.

During the second quarter the company produced a net loss of $0.7 million, improved from first quarter losses of $1.1 million. Total assets at the end of the quarter were effectively flat with 1Q13 at $559.5 million vs. $559.6 million.  Non-interest bearing checking balances grew 18% on a linked quarter annualized (LQA) basis from $114.1 million to $119.1 million. The increase in low cost transaction account balances drove the cost of funds down to 0.35% for 2Q13 from 0.45% in 4Q12.

Credit costs improved from 1Q13 results, with total loan loss provision plus loss on OREO totaling just $178,000 for the second quarter vs. $942,000 during 1Q13. Core bank Other Real Estate owned balances did increase from $3.8 million to $8.1 million as the large loan that caused much of the credit costs in the first quarter migrated to OREO. Excluding this loan, loan balances would have been up marginally on a linked quarter basis.

The Tier 1 Leverage ratio ended the quarter at 8.67% or down just slightly from the year end 2012 level of $8.83%. Tangible book value on a fully diluted basis (including the conversion of all Series AAA Preferred and Series C Convertible Preferred equity) ended the quarter at $7.48 per share. This decline was both the result of the net operating loss as well as a decline in the bond portfolio's unrealized gain position of $1.6 million during the quarter.

The Company also continued to work through its FDIC loss share covered assets, with the net loan balance shrinking by 16% LQA. The FDIC Indemnification Asset declined by $874,000 or 10% from 1Q13 to 2Q13 (41% LQA) and now stands at $7.7 million with approximately 7 quarters remaining on the commercial portfolio loss sharing agreement. 

SouthCrest Financial Group, Inc. is a $560 million asset bank holding company headquartered in Peachtree City, Georgia. The company operates a 14 branch network throughout Georgia and Alabama through its four subsidiary banks: SouthCrest Bank, The First National Bank of Polk County, Peachtree Bank and Bank of Chickamauga. The banks provide retail and commercial banking services, mortgage banking, investment management, and online banking services.  

This presentation may contain certain "forward-looking statements" that are subject to risks, uncertainties, and other factors that could cause actual results and shareholder values to differ materially from those projected. Factors that could cause or contribute to such differences include economic conditions, government regulation and legislation, changes in interest rates, credit quality, competition, and other risk factors.

SouthCrest Financial Group        
Unaudited Financial Highlights        
  6/30/2012 12/31/2012 3/31/2013 6/30/2013
Total Assets 583,761 558,266 559,627 559,456
Total Core Loans** 262,487 241,571 238,822 233,236
Allowance for Loan Losses 7,157 5,719 5,486 4,745
Total Deposits 515,507 495,694 497,221 498,831
Total Equity 57,161 52,518 52,488 50,572
Tier 1 Leverage Ration (%) 9.28% 8.83% 8.93% 8.67%
Non-Performing Assets** 26,856 11,411 15,220 12,723
**Excludes assets covered under FDIC Loss Share agreement


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